Consumer Groups Praise Idea of Financial Protection Agency

Washington Post
July 17, 2009
Dennis, Brady

The Obama administration's effort to create a Consumer Financial Protection Agency, the subject of sharp criticism from many in the financial and business world, received support from consumer advocates at a July 16 hearing before the House Financial Services Committee. "It targets the most significant underlying causes of the massive regulatory failures that have harmed millions of Americans," says Travis Plunkett, legislative director for the Consumer Federation of America. The proposal has encountered stiff resistance from financial and business interests, who warn that a new agency would add another layer of government regulation, increase costs, stifle innovation, and curtail choices for consumers. Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group, compared the need to regulate financial products to regulation of other consumer products. "We regulate toasters to make sure they don't catch fire. We're not banning toasters," he said. "We're simply saying they have to be safe." Mierzwinski, Plunkett and others are part of a sizeable coalition that has formed to fight financial industry groups and others whom they regard as trying to undermine the administration's efforts to overhaul the current regulatory system. The alliance, which calls itself Americans for Financial Reform, includes a collection of nearly 200 consumer, labor and civil rights organizations. It has created a Web site, OurFinancialSecurity.org, and has undertaken aggressive outreach to try to persuade lawmakers and boost grass-roots support.